We live in strange times. Apple’s stock valued the company at over $2 Trillion this week. A reason to celebrate you might think. A company created, famously, in a garage by 2 young men, has grown to be a world leader. But in today’s world it appears that big is bad.
In defence of Big Tech
By Keith Teare
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We live in strange times. Apple’s stock valued the company at over $2 trillion this week. A reason to celebrate you might think. A company created, famously, in a garage by 2 young men, has grown to be a world leader. But in today’s world it appears that big is bad. Epic Games, not a small company itself, has secretly undermined Apple’s rules for its App Store, and when found out and banned, immediately issued a law suit and an accompanying video. It wants to sue Apple for abusing its power. It was banned by Google’s Play Store later the same day and Epic also sued Google.
In this Disneyesque epic, (pun intended) Epic Games is attempting to seize the high moral ground and play the “good guy” while Apple is the Big Bad Wolf. Except……
Wait a moment. Isn’t Apple an independent company? Didn’t it spend many billions building its iPhone, iPad and App Store platform. Isn’t it true that developers had no easy global distribution platform before that? Didn’t it invite developers to distribute their software in the App Store (for free if they don’t charge)? Didn’t each developer sign an agreement to pay Apple 30% of all revenues collected by Apple and its billing platform, and also agree not to use any other billing platform? And didn’t Epic consciously and secretly break that agreement?
The fact that Epic believes it can win popular approval for its approach is an indication that it believes we – the people – no longer believe that investment, innovation and ownership should bestow rights on the owner, especially if the owner is “big tech”. The courts will surely side with Apple here. It is a clear cut case. But why does Epic believe public opinion might go the other way?
The answer lies in the increasing trend to want to equate size and market power with being evil. This is the QAnon theory of business. If you are big and powerful you must be bad.
This week I publish opinions for all sides of this debate, and I start here by declaring ahead of time, I strongly support Apple’s stance and it should take any steps it wishes to protect itself from this attempt to steal its business.
Even those who recognize Apple’s contribution, like Ben Thompson and Ben Evans, they cave to the “big is bad” or at least “big is different and requires changed behavior” mood of the times.
When Ben Thompson of Stratechery says:
In truth, though, while many of the issues surrounding the App Store are about Apple being a whole lot bigger than they were in 2008, the company has, particularly over the last few years, extended its control further and further away from the core integration that undergirds its business.
He is simply making no case other than Apple is big and so can benefit by extending its business based on its past work. Yes, indeed. What is wrong with control over an asset you built?
When Ben Evans says:
Apple has always been at one, extreme, end of that debate, taking a strong opinion on how it thought a good computer ‘should’ work and letting you choose it or not. From 1976 to, say, 2015 or so, it was just one fairly niche vendor, and some people chose Apple’s opinion and some didn’t. But with the iPhone, Apple finally won the argument with users’ wallets, and that means it’s not niche anymore – Apple has become the navy, and different rules apply.
He is doing the same. Different rules do not apply.
Building a big successful business that also serves 100% of developers is hard. Apple has done that. Were Epic Games to get away with free-riding on the App Store, then why would Apple have built such an important global software distribution platform in the first place. Today’s unicorns like Instagram and Whatsapp, Tik Tok and AirBnB all owe Apple and Google a huge debt of gratitude for making it possible for billions of people to install and use software within 24 hours of being distributed. Big tech is good tech and Epic is not helping any good cause apart from its own.
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That Was The Week, Newsletter from Keith Teare. #32.
Reads of the Week
Politics and Technology
Podcasts of the Week
Tweet of the Week
—Reads of the Week
Steve Jobs Video – What is the App Store, and Why it Charges 30%
Credit: Ben Thompson, Stratechery
Stratechery by Ben Thompson
- This gets at why this was another great deal for everyone involved: most users had already trusted Apple with their credit card information, and again, Apple was extending that trust to every developer in its App Store, making it far more likely that developers would earn money on their apps than if they had to drive downloads and purchases on their own.
- In truth, though, while many of the issues surrounding the App Store are about Apple being a whole lot bigger than they were in 2008, the company has, particularly over the last few years, extended its control further and further away from the core integration that undergirds its business.
App stores, trust and anti-trust
- Asking for a credit card to buy an app online created both a friction barrier and a safety barrier – ‘can I trust this company with my card?’ Apple added frictionless, safe payment.
- And, it matters if Apple doesn’t do a good job, because when Apple launched the app store it had sold fewer than 10m iPhones ever, but today a billion people use iPhones, and more importantly so does over half of the US market and 80% of American teenagers.
Apple sets deadline in feud with Fortnite maker Epic Games
- An Epic spokesperson said: “Apple removed Fortnite from the App Store and has informed Epic that on Friday 28 August Apple will terminate all our developer accounts and cut Epic off from iOS and Mac development tools We are asking the court to stop this retaliation.”
- Apple has given the Fortnite developer Epic Games less than two weeks to stop breaking its payment rules or it will cut off Epic’s access to development tools on Mac and iOS.
Parents and students reevaluate college costs amid virtual learning
For higher education, the pandemic has forced major questions about affordability and cost into the spotlight. Both students and parents are hesitant to spend tens of thousands of dollars on classes taken via video, and many feel that the loss of on-campus life upends the college value proposition entirely. Scott Galloway, a marketing professor at New York University, joins John Yang to discuss.
America’s Innovation Engine Is Slowing
- Also essential to innovation in the U.S. are the high-productivity metropolitan regions, such as Silicon Valley, New York, Boston, Seattle, and Austin, Texas, where knowledge-based clusters have sprouted up, typically around universities.
- This trend holds for many of the major industrial clusters in San Francisco, New York, Los Angeles, and Seattle.
The Quiet Rise of Google’s New Head of Search
When Google CEO Sundar Pichai reshuffled his most senior executives earlier this summer, he gave one of the biggest jobs to Prabhakar Raghavan, a former Yahoo research director who had earned acclaim within Google for technology predicting what Gmail users planned to type.
Gray Versus Green: Who Makes the Better Start-Up CEO?
Kevin Bijas is a Principal & Senior Advisor at N2Growth based just outside of Manhattan in Central, New Jersey. Kevin boasts 13 years of retained executive search experience in the technology sector in North America.
Apple, the Bundler
- Hardware would make a bundle far more expensive but as long as there are tiers — which it seems like there are already going to be at least — one could imagine an ‘Apple One Pro’ plan, where you get a new iPhone every year along with all the services and support.
- The Apple Services Bundle As Mark Gurman scooped today for Bloomberg , Apple is on the verge of rolling out a bundle of their services: The bundles, dubbed “Apple One” inside the Cupertino, California-based technology giant, are planned to launch as early as October alongside the next iPhone line , the people said.
—Politics & Technology
China’s mixed—and resilient—economy
- Week in charts China’s mixed—and resilient—economy And its business clout • Failing State Department • Economic convergence • Grey, anti-growth Tories China’s leader, Xi Jinping, is remaking the economy for the 2020s, blending enhanced Communist Party control with market mechanisms .
- Last year China overtook America as the country with the most embassies and consulates around the world.
Tencent, Xiaomi Invested in TikTok’s Parent, ByteDance
The list of current and former investors in TikTok’s owner ByteDance include some of the biggest names in finance, including Sequoia Capital and General Atlantic—along with some of the biggest Chinese tech firms.
★ On TikTok as a Security Threat
- But there is no evidence to date that TikTok is a security threat in the sense that their app might be doing anything secretly nefarious on our phones.
- All iOS and Google Play Android apps are installed in sandboxes — no app, TikTok or otherwise, has access to data outside its sandbox.
The Case Against a Microsoft-TikTok Merger
Stories by Scott Galloway on Medium
- The Case Against a Microsoft-TikTok Merger The Chinese will not be bullied into selling a global internet asset on the cheap CNN: “Section4, the online education startup founded by NYU professor Scott Galloway, is in discussions to acquire TikTok.”
- Twitter’s stock rose 5% after news broke of its interest in the app, though shares closed lower as the market likely realized that Twitter doesn’t have the balance sheet or the leadership for a merger of this size.
California Uber and Lyft drivers brace for shutdown over worker classification
- Uber and Lyft threatened to shut down operations in California over a court ruling on the lawsuit issued on 10 August ordering them to abide by California’s Assembly Bill 5 law (AB5) – which extends employee status to gig workers – and to classify their drivers as employees by 20 August.
- The coronavirus pandemic has hit so-called gig economy workers hard and ramped up local and state efforts to classify Uber and Lyft drivers as employees rather than contractors, a move that would improve minimum wages and benefits for drivers.
The Diversity, Inclusion and Anti-Racism Framework for VC
The Anti-Racism Ownership Framework, a new best practice for Venture Capital
Over the past couple of months systemic issues of racial injustice have elevated to a deserved level of priority in society broadly, and within the VC industry as well. As a Black man in America, who is also a general partner at VC firm M25, I entered the discussion with “Racism won’t die in 2020”, “There’s No Debate: Good People Aren’t Good Enough”, and “Founders need stewards, not masters”. After an overwhelming response from thousands of readers, I’m writing this piece as an answer to the call from many allies within my industry to answer the question…
“So, what do I do?”
Google giving far-right users’ data to law enforcement, documents reveal
- But checking the documents against Google’s platforms reveals that in some cases Google did not necessarily ban the users they reported to the authorities, and some still have accounts on YouTube, Gmail and other services.
- The Google documents retained by NCRIC highlight the activities of individual users, providing detailed subscriber information, which often includes real names, street addresses, credit card numbers, Gmail and recovery email addresses, YouTube channel addresses and the time and IP addresses of recent logins.
Our (Mostly Male) Tech CEOs Face a Time of Reckoning
Earlier this week, while scanning Twitter in between meetings, I saw an article about a new gender discrimination suit filed against Pinterest. I made a mental note to read it later.
How to Angel Invest, Part 1
- A decade ago Y Combinator was brand new; AngelList didn’t even exist; the First Round Capital platform wasn’t there; Andreessen Horowitz wasn’t there; you didn’t have a lot of late-stage investments by hedge funds; you still had companies going public earlier.
- I see a lot of people in Silicon Valley who could be good angel investors —they are in the tech industry and have access to dealflow—but instead spend their time on other things.
6 Family Office Trends In Direct And Venture Capital Investment
- Family office direct investment trends can be attributed to several factors including the accumulation of assets and talent required to effect such investments on the single family office’s behalf, more robust networks, as well as the greater control and decision-making ability, as well as better value and interest alignment and returns that these deals afford.
- 2. Rising venture capital investment Campden Wealth Research shows that based on strong historical returns, family offices have increasingly allocated capital to venture and developing in-house venture investment capabilities over the past decade.
Visualized: How Much Revenue Automakers Generate Every Second
- Capping off the list is the world’s most valuable automaker , Tesla, which generated a relatively smaller $24.6B in gross revenue, or $780.06 per second.
- While a majority of these vehicles were produced in Europe, the group operates a global production network with a significant presence in Asia.
Expect A Lot More $2B+ Acquisitions in SaaS and Cloud
- And if you are going to buy growth, you want to buy the biggest, fastest-growing thing you can afford.
- With Twilio then seemingly priced to perfection, and with investors expecting huge growth rates … they bought the biggest thing in email API they could afford, not the smallest.
Abu Dhabi’s Dh535 million Ventures Fund will be transferred to ADQ
- Abu Dhabi’s state holding company ADQ is partnering with the Abu Dhabi Investment Office (Adio) to develop the emirate’s start-up ecosystem and attract further investments into its digital economy.
- ADQ also launched a Dh1.1bn venture fund in May to invest in early-stage Indian and Southeast Asian start-ups and help them set up a base in Abu Dhabi’s Masdar City.
Chamath Palihapitiya’s next big Hustle
- He wants Social Capital to be similar to Berkshire Hathaway, which owns businesses and holds billion-dollar stakes in companies like Apple and Coca-Cola.
- The billionaire co-founded Social Capital in 2011, and seven years later, he pivoted the investment firm into a technology holding company.
Welcoming Our Newest Partner, Aaref Hilaly
- We spend our time meeting thousands of people a year — founders, CEOs, engineers, executives — all with the purpose of finding that right alchemy of character, personality, vision, experience, and instincts to build a great business.
- Aaref joins our other early-stage partners in SF (Kevin, Sarah, Stefan, and the two of us) for a team of six partners as we look to add to our West Coast portfolio that includes companies like Acorns , Armis , Bloomreach , Cameo , Clari , CloudGenix , DocuSign , Finix , Gainsight , Lime , LinkedIn , Moveworks , Netdata , Redis Labs , Rubrik , SendGrid , Sysdig , Wrike , and many more.
Investments That Don’t Work
- I woke up to a dream this morning where I was playing a game that was very similar to Turntable.fm , a failed effort to create a social music experience that had a moment back in 2011 and that I had invested in via USV.
- And investments that don’t work are often failures of execution.
Tel-Aviv Stock Exchange Bridges the Gap between Israeli High-Tech and Thousands of Institutional and Accredited Investors with TASE UP
- Today, we are taking this commitment to the next level with TASE UP – a platform that completely transforms capital raising by companies and, for the first time in Israel , harnesses the advantages of the Tel Aviv Stock Exchange, such as access to investors and liquidity, to the benefit of those companies that, at least for the time being, wish to remain private.
- A New Home for Israeli High-Tech: A Unique Platform that Offers Private Technology Companies New Paths for Capital Raising from Accredited and Institutional Investors
Why venture capitalists must specialize
- “Specialization was a necessary reaction to heightened investment competition,” said Julian Counihan, general partner at Schematic Ventures, a San Francisco-based early stage fund focused on technology companies in the supply chain, manufacturing, commerce infrastructure and digital industrial sectors.
- “Since 2000, public listings have declined by almost 50%,” said Ty Findley, managing partner at Ironspring Ventures , an Austin, Texas-based firm focusing on early stage investments in the industrial supply chain.
Time to plug the public market ‘listing gap’
- Why institutional investors want more exposure to private markets, dominated by buyout funds and venture capital, is explained in fascinating detail in a research report from Morgan Stanley.
- Many start-ups, which might previously have gone public, are software businesses with minimal capital requirements and ready access to private market funding.
Pantera Capital reports raising $165 million in new SEC filing
- Crypto investment company Pantera Capital has raised nearly $165 million in private funding from investors, according to a Form D filing with the U.S. Securities and Exchange Commission (SEC) on Friday.
- “We haven’t raised an additional $167MM, it’s just that the final legal closing of Fund III occurred in August this year so our filings were updated,” Pantera co-chief investment officer Joey Krug told The Block in an email.
Figma CEO Dylan Field discusses fundraising, hiring and marketing in stealth mode
- The company behind the largely browser-based design tool has made a huge splash in the past few years, building a massive war chest with more than $130 million from investors like A16Z, Sequoia, Greylock, Kleiner Perkins and Index.
- The company was founded in 2012 and spent several years in stealth, raising both its seed and Series A without having any public product or user metrics.
5 Key Strategies To Build Fundraising Momentum With VCs
- Over the last four years as CEO and co-founder of investor management CRM Foundersuite , I’ve seen entrepreneurs raise over $2.2 billion in seed and venture capital — and the most successful among them do it by carefully controlling their round and building momentum throughout the process.
- 2. Get really personal Fortunately, the more time you spend researching, qualifying and putting together a highly targeted list of investors, the more momentum you’re going to experience when you begin reaching out to them.
The blood of an entrepreneur
- That problem has been screened out here, folks, as not only do immigrants not have a backup plan while they’re taking a major risk, but 1) the odds are stacked against them, 2) they likely have little to no allies, and 3) the only thing they can truly control is that no one outworks them.
- At 13, although his parents were highly educated chemical engineers, their opportunity (much like my dad’s) was to work hard to survive .
Airbnb’s IPO Prospects, By the Numbers
Marker — Business News and Articles for Startups and Leaders – Medium
- $64 billion: That’s how much initial public offerings listed on U.S. exchanges have raised in 2020, according to Dealogic, a market analytics firm.
- As the stock exchanges have recovered, the IPO market has been on fire — a rush of public offerings has already added up to a bigger IPO haul in 2020 than in any year since 2014, according to Dealogic data provided to Marker .